2018 (5) TMI 286 - AT - Central Excise

Time limitation - Penalty - N/N. 22/2003-CE dated 31.03.2003 and N/N. 52/2003-Cus dated 31.03.2003 - goods imported and procured locally free of duty and cleared to DTA - Held that - the appellant are not eligible to the benefit of Notification No .22/2003-CE dated 31.03.2003 and 52/2003-Cus dated 31.03.2003 - extended period of limitation cannot be made applicable to the facts of the present case as the issue itself is marred with conflicting views and the matter referred to the Larger Bench for resolution - also on similar grounds penalty on the appellant cannot be imposed - appeal allowed in part.

Summary

Issues:
- Entitlement to benefit of exemption under Notification No. 22/2003-CE and Notification No. 52/2003-Cus
- Applicability of extended period of limitation and imposition of penalty

Entitlement to benefit of exemption under Notification No. 22/2003-CE and Notification No. 52/2003-Cus:
The appeals were filed against an order passed by the Commissioner of Central Excise Vadodara-I regarding the entitlement to the benefit of exemption under Notification No. 22/2003-CE and Notification No. 52/2003-Cus on goods imported and procured locally free of duty and cleared to DTA. The Larger Bench of the Tribunal considered conflicting views on the subject and observed that the 'non-excisable' words used in the relevant notifications encompass all 'zero' rated finished goods due to full exemption, 'Nil' / 'Free' rates, or where no rate is specified under the relevant tariffs. The question of law was answered in favor of the Revenue and against the assessee based on the observations made. The appellant argued that they are eligible for the exemption notifications, and the interpretation by the Larger Bench was incorrect. However, the Tribunal held that the disputed issue was resolved in favor of the Revenue by the Larger Bench, thereby denying the appellants the benefit of the notifications.

Applicability of extended period of limitation and imposition of penalty:
The appellant contended that the extended period of limitation should not be applicable as the issue itself was marred with conflicting views and was referred to the Larger Bench for resolution. They also argued against the imposition of a penalty on similar grounds. The Tribunal acknowledged the argument presented by the appellant's advocate regarding the inapplicability of the extended period of limitation and the penalty imposition due to the conflicting views on the matter. Consequently, the demands were confirmed for the normal period of limitation, and the appeals were partly allowed to that extent. The Tribunal disposed of the appeals accordingly, considering the arguments presented and the resolution by the Larger Bench on the disputed issue.